Question

A firm's ________ is the level of sales necessary to cover all operating costs, i.e., the point at which ebit equals zero.

Answer 1

A firm's operating breakeven point is the level of sales necessary to cover all operating costs.

More about operating breakeven point:

The point at which sales revenue equals all fixed and variable costs while producing no profit for the company is known as the operating breakeven point. A fixed cost is a cost that a company incurs regardless of how many units are produced.

Fixed costs include things like rent, insurance, and interest payments. On the other hand, a variable cost is a cost that varies according on the amount of output. Variable expenses include, for example, labor and raw materials.

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Complete Question:

A firm's ________ is the level of sales necessary to cover all operating costs, i.e., the point at which EBIT equals zero.

A) cash breakeven point

B) financial breakeven point

C) operating breakeven point

D) total breakeven point